Marketing-led Technology Drives Financial Innovation

While we’re experiencing a boom in fintech, with global financing reaching $USD 105 billion, this growth is still a drop in the bucket compared to the breadth of the entire financial services industry, which is estimated at USD $13 trillion. Financial innovation in the B2C sector—including banking, investment management, and lending to individuals and small businesses — is accelerating as brands race to compete with new disruptive services and their own evolved competitors, thus driving the wholesale evolution of the industry. This is evident from enhanced personalization, data-driven decision making, thoughtful UX, and relevant content. Overall, finance brands are making progress in putting the customer first and meeting the expectations of today’s experience-oriented consumers.

B2B financial services players — investment managers, banks, etc.— serving institutions, wealthy individual investors, and intermediaries, have on the other hand, had little outside pressure to become as innovative as their B2C brethren. They are the bedrock of the financial system, and outside of a few exceptions like BlackRock, they’ve continued to operate their marketing and technology organizations as an entrenched incumbent would. The industry has not had a rude awakening like that of B2C financial services, largely resulting in this slower rate of innovation and adoption.

As retired GE CEO Jack Welch famously said, “Change before you have to.” Most industries change only to mitigate disruption when it happens. Granted, sometimes disruption comes too fast to notice. Think Blockbuster, Sleepy’s, or Radio Shack. Without forces of disruption from outside, the entrenched legacy platforms and structures that are beginning to be overhauled in B2C financial services organizations, are weighing down innovation in their B2B counterparts, becoming more and more unwieldy and difficult to evolve. The few innovators in this B2B space that are evolving before they have to, are growing with marketing-led technology, and are capitalizing on that as their competitive advantage.

Today’s Breakthrough Brands have intertwined marketing and technology operations so they can better serve their customers. They might be marketing-led because marketing’s goal is to move goods and services from concept to the customer — pure and simple. However, technology is frequently the essential competitive differentiator in making this happen. Excelling at marketing without technology is not an option. With that said, the biggest technology challenges facing these organizations don’t stem from insufficient budgets, probably just the opposite. They are the result of over-engineered legacy systems that are expensive and painfully difficult to maintain or innovate within. Legacy platforms require armies of engineers to maintain and antiquated processes. This doesn’t just stymie innovation, it outright kills it.

The level of protectionism that exists in the IT organizations of these firms is a double-edged sword. While it can be unnerving to modern marketers, IT is mission critical in mitigating firm security risks, which is why IT wields its protectionist muscle reflexively and owns so much power over marketing. Getting past this reflex is not easy and requires leadership that understands the implications of transformation, and works through it to build platforms, processes, and systems that are user-first versus systems-first. This requires teams that yearn to move faster, to build on modern frameworks, to leverage the same technology and marketing stacks that are powering Breakthrough Brands to build the contemporary customer experiences that are being adopted by B2C financial companies.

This shift is not easy, especially when it feels unnecessary and further highlights the tension between Marketing and Technology organizations within companies. Breakthrough Brands, most smaller and more agile by nature, have resolved this tension by focusing on serving their customers first and foremost, and by better integrating these departments from the start. For most Breakthrough Brands, that means aligned value drives organizational priorities and ways of working to serve the customer first, regardless of department. This evolution is inevitable for organizations of all types, and the brands that get their first will not only grow their market shares, but begin to reshape the industry at large.